40 percent of the global market in the three areas of corporate IT services, software, and data centers. The communications and device markets in the Asia Pacific region are huge and are expected to grow at 5.4 percent, by virtue of the enormous populations in China, India, and the ASEAN region. Similarly, the data center market in the Asia Pacific region is tabbed to expand at a remarkable 5.7 percent rate (Figure 2-2-1-1).

### 2. Japan’s position in the ICT market and global market trends

## (1) Movements among leading ICT players

Tracking the financial results of leading ICT businesses in 2013 clearly shows that the application layer continues to see favorable results. Domestic communications carriers have enjoyed increased revenue sustained by the rise in smartphone users and the accompanying boost in data communications charges. Furthermore, SoftBank, which has pushed its overseas expansion with the purchase of the U.S. carrier Sprint, posted consolidated earnings in excess of 6 trillion yen and has taken the lead among Japan's three mobile carriers in operating profits as well, due to the profit contributions after taking a controlling interest in GungHo Online Entertainment. Most device makers saw a large jump in profits, thanks in part to the effect of Abenomics, and the overall trend points to a recovery (Figure 2-2-2-1).

## (2) KFS in a globalizing ICT industry

The Key Factors for Success (KFS) described below were selected after an analysis of historical transitions, overseas expansion developments, and contextual factors at leading global corporations.

The first success factor nearly all leading globally developed corporations have in common is aggressive overseas expansion and pursuit of economies of scale against the backdrop of a globalizing ICT industry. Market globalization is sometimes perceived negatively, as the number of competitors typically increases and commoditization advances. Nevertheless, corporations that aggressively push overseas expansion are the ones that have secured a presence in today's global ICT market. They do so by moving into new high-growth markets and effectively incorporating a global environment into their operations: for example, leveraging overseas development and manufacturing resources.

Another characteristic of the ICT market is the incredible speed of market transformations, which have been especially striking in the device layer, where the leading products have been completely supplanted in just 10 years. It is extremely vital for corporations to gauge these changes as early as possible as well as to make prompt decisions on what business domains to select and focus on and secure sufficient scale in order to align their own business ventures with market developments.

The third KFS is the importance of personnel and technology to ensure international competitiveness. Corporations need the right personnel and technology so they can continually develop new products and value-added services that fit the changing market landscape.

Figure 2-2-2-1 Financial results of leading ICT players (FY 2013)

Overseas corporations $ ^{*1*2} $

Application layer	Sales	Operating profit
[in ¥100s of millions]	Year-on-year change	[in ¥100s of millions]	Year-on-year change	Operating profit ratio
Amazon	76,760	21.9%	→	768	10.2%	1.0%
Google	61,680	19.2%	→	14,399	9.5%	23.3%
Facebook	8,116	54.7%	→	2,891	421.2%	35.6%
AT&T	132,743	1.0%	→	31,424	134.5%	23.7%
Verizon	124,287	4.1%	→	32,959	142.9%	26.5%
Microsoft	65,418	9.5%	→	21,937	2.8%	33.5%
IBM	102,843	-4.6%	→	50,009	-3.6%	48.6%
Oracle	27,791	2.8%	→	10,155	1.7%	36.5%
SAP	23,959	3.7%	→	7,816	5.7%	32.6%
Huawei	40,586	8.5%	→	4,946	41.0%	12.2%
Ericsson	35,834	-0.2%	→	2,812	70.6%	7.8%
Cisco	50,114	5.5%	→	11,543	11.2%	23.0%
Apple	176,208	9.2%	→	15,779	14.0%	9.0%
Samsung	224,119	13.7%	→	36,049	26.7%	16.1%
Nokia	18,018	-17.5%	→	736	190.0 billion increase	4.1%
BlackBerry	7,024	-38.5%	→	-7,385	611.2 billion decrease	-
HTC	7,099	-29.6%	→	-139	79.6 billion decrease	-2.0%

Japanese corporations $ ^{*1} $

Application layer	Sales	Operating profit
[in ¥100s of millions]	Year-on-year change	[in ¥100s of millions]	Year-on-year change	Operating profit ratio
Rakuten	5.186	29.5%	902	80.3%	17.4%
Yahoo	3.863	12.6%	1.974	5.9%	51.1%
DeNA	1.813	-10.4%	532	-30.8%	29.3%
GREE	990	-14.1%	289	-29.3%	29.2%
mixi	122	-3.8%	5	-81.3%	-3.9%
GungHo	1.631	631.5%	912	981.2%	55.9%
Account for 2013
Communications	NTT consolidated	109.252	2.1%	12.137	1.0%	11.1%
NTT DoCoMo	44.612	-0.2%	8.192	-2.1%	18.4%
KDDI	43.336	18.3%	6.632	29.4%	15.3%
SoftBank	66.667	108.2%	10.854	35.8%	16.3%
NTT Data	13.438	3.2%	626	-27.0%	4.7%
Hitachi	96.162	6.4%	5.328	26.3%	5.5%
Mitsubishi Electric	40.544	13.7%	2.352	54.6%	5.8%
Fujitsu	47.624	8.7%	1.426	61.5%	3.0%
NEC	30.431	-0.9%	1.062	-7.4%	3.5%
Handsets*3	Sony	77.673	14.3%	265	-88.3%	0.3%
Panasonic	77.365	5.9%	3.051	89.6%	3.9%
Toshiba	65.025	13.5%	2.908	47.0%	4.5%
Sharp	29.272	18.1%	1.086	254.8 billion increase	3.7%

*1. Figures for overseas corporations, as a rule, are for the January–December 2013 period, and figures for Japanese corporations, as a rule, are taken for the April 2013–March 2014 period. Arrows in bold represent year-on-year changes of more than ±30 percent or sales profits, sales losses, or operating losses of more than ¥100 billion. Horizontal arrows represent changes within ±1 percent.

*2. Figures for overseas corporations were converted to yen with the following conversion rates (the rates at the end of December 2013): 1 U.S. dollar = ¥103.10, 1 Euro = ¥141.77, 1 KRW = ¥0.0980, 1 Taiwan dollar = ¥3.490, 1 Chinese Yuan = ¥16.98, 1 SEK = ¥15.76.

*3. Figures for electronics manufacturers include revenue from businesses other than mobile handsets, as the figures were taken from each company's consolidated financial statements.